Are you calling for the return of GMAC? Sounds like a sequel to a song from that era.
“'Cause what you did, you know, was wrong
And all the nasty things you’ve done”
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You might be right. Carvana is bleeding a ton of cash, and has over 5 billion in debt it will need to pay back at an inflated interest rate. Add to that, the higher loan rates, and higher than avg prices they pay isn’t going to help.
Don’t forget buying out Hertz to rent out the cars they make like Ford did!
The only thing that’s nuts is that Carvana’s gross profit per unit is over $6k vs CarMax is only around $2300.
Net profit, totally different story because of their debt, but insane to me regardless.
Scale does matter and Carvana picking up Adesa helps them immensely with the logistics aspect of the business and probably driving that gross profit number.
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That gross profit is going to continue to drop just like it is with every other car company right now. They were all at record levels and tapering off at this point. The fact that carvana can make that much per unit and still be technically bankrupt shows how poorly it’s run.
As manufacturers start increasing incentives on new cars, the newer preowned cars they sell will look less attractive leading to less profit per vehicle. Their ease of purchase is the one thing they have going for them as many people don’t like dealing with the new car model of negotiations.
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Probably right about their gross profit declining. I’d argue they had to take on that much debt to build out their nationwide network (probably didn’t need those “vending machines” but I suppose they’re good for advertising). The Garcias are shady business people to begin with and that shows with Carvana (titling issues, temp tags on temp tags across the country, etc).
Shocking number of people just buy used from Carmax and Carvana without even glancing at pricing of new cars.
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This always blows my mind because their cars always seem so overpriced, I guess that’s why I have sold 2 cars to them 
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I’ve met people that only ever bought from BHPH lots because that’s what was local to them and they felt they were getting a fair shake as they didn’t know any better, I’m sure carmax has built a similar following over time as well.
Autonation is supremely well run.
bhph lots?! that’s insane. Carmax definitely has people who only buy from carmax, my neighbor being one of them
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It’s a different world outside large metro areas.
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Carmax offered to buy out. My car for $12-15k under value.
They are sinking in neg eq inventory
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Going into a Carmax for them to give you an offer is so slimy. They hire Jiffy Lube rejects to tell you about how they only make $1,000 on every car sold and all the difference between what they offer and what they list/sell for is for reconditioning.
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I had NO intentions of selling my car. I wanted to see how bad they were all doing. I did it electronically!
What is the definition of value? Another bid?
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Wayne Huizenga was a visionary.
I believe still the only person to create 5 Fortune 500 companies.
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Market born and supported valuation
CarMax also lowballed me on my 2023 Model 3 RWD with 6k miles on it. They offered me $23k. Most similar cars in their inventory are $34k to $36k with one being $38k. CarMax was the lowest offer and Carvana was the highest ($31k).
I did see a Cayenne on their lot that was marked down $10k (they left the previous price sheet in the backseat). They also dropped the price of an X7 by $3k.
I got a dramatically low carmax offer (in person appraisal) a couple of weeks ago and similarly Carvana was tops.